Investing idea: Visa

Hi,

there is stock which I am following and will try to invest in. The name of the stock is Visa inc.

My first intake on the company:

- a great moat: there are only three major card providers (Visa, Mastercard and American Express). Visa and Mastercard focus more on debit cards ( they get there money from the transaction fees (i.e: the more cards they have issued, the more transactions they are, the more money they make) and at the difference of American Express (which also does credit cards: it can make money by loaning funds to it's clients but it can also lose money if the client defaults), they are much more present in the debit card market than on the credit card market.

- Visa has issued three times more debit cards than Mastercard. Visa definitely holds the number one seat.

- A very good brand, I usually think Visa when I think about a credit or a debit card. Ok American Express is an ever better brand but there market is smaller as they focus on high net worth individuals even if they have aimed for the mass market with the blue card.

- The largest outreach: there are much more retailers which accept Visa than Mastercard and American Express (for the latter it is not unusual to see a commercial outlet to refuse to take an Amex as the fees are higher).

- A important share repurchase program ( if my memory doesn't betray me I think it amounted to 3,4 billion dollars) which will increase the net profit per share of those who do not sell their shares. Let's not forget that Warren Buffett really likes companies who buy back shares.

- Todd Combs, one of the newly hired money managers by Warren Buffet invested in the share. That is always interesting! I admit that it is copycating Warren Buffett's investing ideas but nevertheless it proves that Warren and his team are the best!

There are two points for the time being which make it not the perfect moment to invest in the share:

- the share is trading at it's highest historical price. But it is true that Visa has lots of growth potential (emerging markets are going to be equipped with credit/debit cards, more and more transactions are done through credit cards rather than checks and cash).

- as I live in France, the euro has weakened quite a lot against the dollar in the last couple of months so the acquisition will make it more expensive for me and it adds a currency risk to my potential acquistion (to which I should answer back by saying that if I am going to buy, I am there for the really long run so I should not be worried by currency issues!).

Hope you enjoyed the post!

In another post I will get more into a financial analysis!

As always, if you invest in a share it is for the long run, you have to be patient and only invest money which you do not need. This is only a personal advice, we are all big boys so if you invest in the share it is your call and if you lose money it is your sole responsability. (Sorry but it is the usual disclaimer!) I will be completely transparent with you as soon as I will have bought the share.

Cheers

Jeremy